Tag: social networks

I am a big believer that Facebook’s massive growth is bigger than most people think. They are pushing a utility that delivers big time value. Over the past year I have been studying the utility of Facebook and can tell you that it’s not about just sharing and throwing sheep – It’s about people in a new paradigm. Facebook has the opportunity to take a very strong value proposition and evolve how users discover and navigate (the core principles of search) BUT more importantly they are in the exchange position of real value – actionable value transfer. Simply put: they broker transactions from finding lost friends, staying in touch with existing friends, making new friends, to finding and buying products and services. They can be a hub of collaboration of all sorts. All of those elements make them poised to make it big time. If they continue to keep their eye on the user experience (utility) ball then they can get there. Their numbers are just too big to be dethroned. The only way Facebook will miss the opportunity is if they screw it up on their own. Facebook as they say is ‘gold plated’.

Here is a post from Facebook’s CEO Founder Mark Zuckerberg.

Today, we reached another milestone: 150 million people around the world are now actively using Facebook and almost half of them are using Facebook every day. This includes people in every continent—even Antarctica. If Facebook were a country, it would be the eighth most populated in the world, just ahead of Japan, Russia and Nigeria.

When we first started Facebook almost five years ago, most of the people using it were college students in the United States. Today, people of all ages—grandparents, parents and children—use Facebook in more than 35 different languages and 170 countries and territories.

The full potential of the web is to make the world more open, so everyone has a voice and can share what is important to them. With 150 million voices and counting, we can’t wait for the rest of 2009, and we look forward to offering even more ways for you to connect with the people who matter most.

What strikes me about Facebook is that they seem to be ‘stuck in the middle’ as it goes in business school. Are they a software developer of a great user experience web service or are they an innovative advertising solution? With all the mounting pressure to monetize they may be falling in the trap to force a monetization strategy that will fail. What comes to mind is the Portal crazy in the late 90s.

Back in late 90s Google created a kick ass search app then just picked up (copied) the search paradigm from Goto.com. Why? Because they developed a great app called search. Search drove Google’s success in advertising because their core competency was in algorithms and data center efficiencies that translated directly to what the ‘scaling’ ad market wanted. Google was smart. They knew what they wanted to do.

Here we see Facebook (I wasn’t invited so I can’t comment on what they presented) rolling out a new design for the profile page. It feels like a little AOLish to me. I just don’t get the feeling that Facebook gets UI, discovery, and search. Are they force fitting the UI, navigation, and user experience to get paid on the monetization side? What I will be looking for here is how well they design the ‘utility’ for users. If they try to hard to monetize they will fail. Facebook has to innovate on the software side or they will lose users fast. Facebook has to solve their ‘clutter problem’. Additionally, I hope that they are more open for integration for developers.

If Facebook screws this up they won’t be the next Google, but instead be a victim of what we saw with Portals in the late 90s. We all know how that ended up.

Will Facebook be the Portal model of Social Networks? What is their core strength?

I’ve seen this movie before in 1998. The ad business is changing again. Back in 1998 the rage was impressions impressions impressions..it’s was all about banner ads. Then it became clear impressions and paying for traffic wasn’t working for advertisers – enter performance advertising – the paid keyword.

Today we are in a similar dynamic. Sure the ad market is showing weakness but it’s not because it isn’t effective. It’s because the CPM don’t get the job done for advertisers and publishers. New products will be coming…

I think that Social Gaming Network is on to something really big. The social graph is working and these guys have proven how fast applications can grow. The big news here is the scale of their reach and the platform that they are building for Social Graphs and Social Networks.

Here is my equation for successful marketing or advertising in today’s web 2.0:

Advertising 2.0 = (Social Media + Social Networks) + Social Commerce

I’ve been involved in successful social media campaigns and one consistent observation is that content is very important to influence social networks which in turn creates a ‘conversion’ or social commerce dynamic.

Update:

Twitter conversations are suggesting that agencies will still be around. Maybe a better title for this post would be: Traditional Ad Agencies are Dying – Make Room for the New Modern Agency.

For example GM, Intel, Microsoft, and leading bellweathers in advertising are all doubling down every year online advertising at the expense of other areas like TV and print. If you believe that TV, print, radio, newspapers are declining then the firms servicing them will disappear.

Here is a graph in today’s adage that shows the spend trends in the automotive sector.

For the past three years I’ve been working with over 40 corporate advertisers in developing, testing, deploying, and measuring social media. I’ve discovered many things and learning more everyday. As I am documenting my findings I have to highlight Charline Li’s post from yesterday.

The big trend in Charlene’s post is that social individuals, groups, networks, graphs are great, but they still don’t connect to real world value. This linchpin to real world benefits is where I have the vision for social everything – it’s about collaboration. Virtual activity is highly productive, but seems to dead end when translating and scaling to real world offline benefits.

If you have been one of the 10k people following my blog you know where I stand and have a sense of what I’m working on for my next venture- Social Advertising, Social Media, Social Graph, Social Everything. Charlene’s post reasonated with alot of my findings and the direction that I’m heading. Here are some nice gems in Charlene’s post:

“.. the idea of social graphs being “owned” by different social networks makes no sense. Yet, all of today’s social networks build their business model and competitive advantage on having the largest, most complete social graph. The result: I have a close colleague who enjoys exploring all of the new social networks and “friends” me on all of them, figuring I’m a pretty good person to have in his new network. In a world with a single social graph, he would be able to import his existing personal, social graph into any new service, and immediately begin enjoying the new service without having to wait for his friends to catch up. And I would be spared the insanity of having to accept his umpteenth “friend” invitation!….In a world of a single social graph, social networks will have to compete on the basis of creating the best experience for its members – not because it controls a unique social graph.”….

…”The brilliance of Facebook Platform is that it greatly expanded what people could do on social networks. The problem is that what people do is still pretty limited. Take a look at the top applications on Facebook – they can be roughly grouped into 1) managing/comparing/interacting with friends in a general context; 2) self-expression (FunWall, Bumper Sticker); 3) games; and 4) media preferences (iLike, Flikster). These are all fun and interesting, but they only begin to scratch the surface of what I do every day.”….

…”A business model where social influence defines marketing value. Today’s advertising models don’t work on social networking sites – that’s because simply targeting better on profile or social graph details is still the same old media model of CPM and CPC pricing. What’s missing is marketing value based on how valuable I am in the context of my influence. For example, Steve Rubel is a highly influential person because he is an authority on social media, the people in his social graph tend to interested in his views, and they in turn have a great deal of authority as well. (Several people came up to me after the speech and said that this is similar to a “PageRank of people”, a very easy way to crystallize the idea.)

This means that each person will have their own “personal CPM”, an idea I heard JWT‘s Marian Salzman discuss at a private event in February (here are more details on the JWT’s Top Trends for 2008). The idea is that marketers want to reach highly influential people, and hopefully curry their endorsements. This has traditionally been the province of public relations, where they reach out to key influencers. But in the world of social networks, this is influence writ large and wide – every person has their own network of influence, and hence, their own personal CPM or value that they contribute to a social network.

..”There are several start-ups as well as established agencies that are already looking at marketing, brokering, measuring, etc. social influence, so you can expect to hear more about this topic soon. But don’t expect advertising spending to quickly embrace social influence – after all, the vast majority of ad budgets are spent by media buyers who still cleave to the tried and true reach and frequency, CPM models.”

Why is this relevant? Because as pointed out yesterday by industry visionaries, the iPhone SDK announcement represents the biggest trend since the PC revolution – socially connected individuals, groups, and media are at the heart of this new revolution.

Social Everything includes devices (iphone) to connect to networks (open social + social graphs) to consume media and information (social media). Users love it and so advertisers will soon have solutions – hopefully provided by us entrepreneurs.

Facebook is getting dirty. I’m pounding out more rejections for unwanted stuff and unwanted clutter – Facebook is dirty. Others are feeling tired of Facebook.

Facebook is so cluttered that it feels dirty. Meanwhile the new LinkedIn is clean. It reminded me of how Google had the clean design in 1998 and all the other search engines went down the cluttered portal route.